What is BC Assessment?

BC Assessment is a provincial Crown corporation that determines the market
value of all real properties in British Columbia. After determining the correct
classification, actual value and exemption status of every property, BC
Assessment provides taxing authorities with an Assessment Roll, which lists all
properties, names of the owners and the taxable values of the land and any
improvements (buildings).

History

The assessment and taxation of real estate in British Columbia has existed
since before 1860. BC Assessment was established in 1974 to replace municipal
and provincial government assessment offices. The independent, publicly funded
corporation was created under the Assessment Authority Act to produce
and maintain uniform property assessments across the province. BC Assessment
evaluates most properties in B.C. based on market value, which is considered the
fairest way to assess property.

The Ad Valorem Tax System

British Columbia uses an ad valorem ("based on value") system of property
taxation. Only real property value (land and buildings) is taxed. The value of
personal property such as cars, jewelry and furniture is not taxed.

The property assessment and taxation system in British Columbia is a two-step
process involving BC Assessment and the various tax authorities. BC Assessment
determines the classification, value and exemption status of property. Tax
authorities then apply their tax rates to assessments. This determines how the
tax burden will be shared among all property owners – residential, commercial,
industrial, farm, etc. Property tax provides approximately 40 per cent of local
government revenue in Canada and is the major source of revenue controlled by
local government.

This market value is determined by following generally accepted appraisal
principles. Each year the assessor takes into account location, size,
topography, shape, replacement cost, age, condition, rental income and sales of
comparable properties in the area, as well as any other factors that might
affect the property's value, to determine what the property would sell for. The
market value of property is recorded on the annual Assessment Roll.

Who are the tax authorities?

Tax authorities – the provincial government, municipalities and some First
Nations – control most of the tax burden by setting rates to raise required
revenues. Tax revenues are used to provide transportation, schools, health
services, recreational facilities, police and fire protection, water, sewer
systems and garbage disposal. Other authorities (regional districts) raise money
for services by providing their budgeted amount (requisition) to the local tax
collectors. These amounts appear on your tax bill.

What is market value?

Market value for assessment purposes is the price
an unencumbered property would sell for on July 1 of the preceding year if a
reasonable amount of time is allowed to find a purchaser.

How is market value determined?

When establishing the market value for a particular property, BC Assessment
considers each property's unique characteristics. These are the same
characteristics that a home purchaser would consider, including size, layout,
shape, age, finish, quality, number of carports, garages, sundecks and condition
of buildings. Services in the area, location, views and neighbourhood may also
influence a property's market value.

Appraisers may enter a home to conduct property inspections, ensuring that
the description and condition of a property is accurately reflected on the
Property Assessment Notice. BC Assessment appraisers analyze all real estate
sales in their area and develop common units of comparison and corresponding
values. They review similarities and differences between properties to arrive at
a uniform assessed value for a particular property.

Why do assessments increase and decrease?

Changes in assessment reflect changes in market value. Market value can
change for the following reasons:

a property may have improved (e.g., a renovation or addition);

demand for property in the neighbourhood may have caused prices and market
values to rise or fall; and

a change in zoning may have affected the value of the land.

How can similar properties have different values?

Similar properties may have different values because:

the properties may be located in different neighbourhoods;

the zoning for each property may be different; or

an adjoining use may affect one property and not another (e.g., one property
is located next to an industrial plant).

Principles

The Assessment Act requires that most land and improvements be
assessed at market value. Exceptions include utility properties, such as
railways, pipelines, power lines and farm land. These properties are valued at
regulated rates.

Property tax is a tax on wealth, sales tax is a tax on consumption, and
income tax is a tax on income. Considered together, these taxes generally insure
that people with greater wealth or greater ability to pay, contribute more tax.
For those who cannot afford to pay property taxes (e.g., some seniors and
disabled persons), tax deferment and tax relief measures are available.